Scottish and Newcastle has come under fire from union leaders over potential job losses as part of its s20million cost-cutting drive.

The brewer announced it is in talks about closing a bottling plant in Reading with the loss of around 80 jobs.

It has also struck a deal with Coors for production and packaging which could threaten more employees.

In the past the company has been unafraid to take unpopular decisions, with the emotional closure of its historic Fountainbridge brewery in Edinburgh among recent examples.

S&N said: "Following a review of our packaging capacity we are consulting with our employees on the closure of our bottling plant at our Berkshire brewery.

"The line is now under-utilised and it is planned to move remaining volumes to the Tad caster bottling facility.

"We have carried out a review of our supply chain and, as a result of that review, S&N has decided to enter into a production and packaging agreement with Coors UK.

"The long-term arrangement will lead to up to 3m hectolitres of trade volume being produced under contract by Coors.

"We are now moving into a consultation process with employees but envisage significant cost savings and reduced capital commitment linked to this arrangement."

Mick Pollek, regional industrial organiser of the TGWU section of Unite, said: "The employees are all in shock and no one knows if their job is safe. We did not know that the brewing and kegging deal had been struck with Coors.

"While we are in consultation with S&N, consultation is somewhat limited when we are talking about a done deal."

S&N also outlined plans to stave off a takeover bid from Carlsberg and Heineken during a third quarter trading update released this week.

Good progress was reported in most core beer markets and brands despite poor summer weather.

It confirmed its French on-trade distribution arm had been sold for s85m and was confident of success in its legal battle to win control of BBH.

A new cider mill is being built in Herefordshire to keep up with growing demand.

John Dunsmore, chief executive of S&N, said: "S&N's portfolio of brands is a unique selling proposition in world beer, and is also particularly well adapted to growing partnerships in developing markets.

"Let there be no doubt - for the team at S&N, shareholder value maximisation is paramount. Nothing is sacred.

"I passionately believe that Scottish & Newcastle will deliver value to its shareholders that vindicates our response to the consortium proposal."

Consortium partners Carlsberg and Heineken were less than impressed with the trading update and in a joint statement said: "The results of the S&N-controlled businesses in Western Europe are disappointing and they remain under pressure.

"The Western European operations account for the majority of profits and almost all group cash flow from operations.

"The raft of tactical initiatives that have been announced for the Western European markets may very well not be in the long-term interests of the business and carry significant execution risk."

They urged shareholders to put pressure on the S&N board to accept the consortium offer of 750p per share.

S&N also confirmed Stephen Glancey has been appointed to the board as group operations director.